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Buzz and Banter

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A Minyan writes, "Regarding your post on Minyanville, I would point out that this injection is only a net addition of $1.25b. The remaining amounts are rollovers of $5b and $10b in overnight and 14day repos, respectively.

Our work shows, that in the past, sustained increases in the size of the long duration repos (previously 28 day, now 14 day) and large net increases of $3.5b/day for 3 or more days are required to alter market direction."

This is correct. What is important is the cumulative amount added through the repo market. The amount the Fed seems to be adding is enough to keep the markets liquid and mitigate volatility.


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